IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Civil Action No.
TYLER DEL VALLE GRADY, On Behalf of Himself and All Others Similarly Situated,
Plaintiff,
vs.
QWEST COMMUNICATIONS INTERNATIONAL, INC., JOSEPH P. NACCHIO, ROBIN
R. SZELIGA,
Defendants.
CLASS ACTION COMPLAINT FOR VIOLATION OF
THE SECURITIES EXCHANGE ACT OF 1934
SUMMARY AND OVERVIEW
1. This is a securities class action on behalf of all purchasers of the publicly
securities of Qwest Communications International, Inc. ("Qwest" or the "Company") between
3/22/01 and 7/23/01 (the "Class Period"), against Qwest and certain of its officers and
directors for violations of the Securities Exchange Act of 1934 (the "1934 Act").
2. Qwest is a broadband Internet communications company that provides
communication services, data, multimedia and Internet-based services on a national and global
basis, and wireless services, local telecommunications and related services and directory
services in a 14-state local service area. In 7/00, Qwest completed its long anticipated merger
with U.S. West, Inc. in a $40 billion transaction. To make the merger appear successful,
defendants made false statements about the Company's business and finances, manipulating the
Company's results through several accounting artifices.
3. On 3/22/01, defendants Joseph Nacchio and Robin Szeliga appeared at a UBS
Warburg hosted senior management meeting where they falsely claimed that they would
legitimately achieve 1Q01 and FY01 EPS of $0.11 and $0.59, respectively.
4. On 4/24/01, Qwest reported its financial results for 1Q01, including
growth of 12% and EBITA growth of 16%.
5. Subsequent to these statements, Qwest's stock price increased, trading as high
SNIPPETS:
This is a securities class action on behalf of all purchasers of the publicly traded
securities of Qwest Communications International, Inc. between 3/22/01 and 7/23/01, against
directors for violations of the Securities Exchange Act of 1934.
Qwest is a broadband Internet communications company that provides communication services,
basis, and wireless services, local telecommunications and related services and directory
services in a 14-state local service area.
In 7/00, Qwest completed its long anticipated merger with U.S. West, Inc. in a $40 billion
Company's results through several accounting artifices.
defendants Joseph Nacchio and Robin Szeliga appeared at a UBS Warburg hosted senior
growth of 12% and EBITA growth of 16%.
Company's strong expense controls were materially false and misleading due to the Company's
improper valuation of KPNQwest in violation of Generally Accepted Accounting Principles,
as expenses were being deferred to future quarters and years;
This was the reason SG&A expenses had been only 22% of revenue in 1Q01 and not due to Qwest's
The individual defendants took advantage of this inflation, selling 1,255,000 shares of their
Based on results for January and February, which shows strong growth for Qwest's Business
of revenues and EBITDA of $8.5B-$8.7B for 14.9%-17.6%); and CAGR growth rates for 15%-17% revenue
"We achieved strong revenue and EBITDA growth for the quarter as our focus on execution and
Q managed extremely solid execution on all aspects this quarter, meeting expectations for
We are adjusting our 2001 EPS estimate from $0.59 to $0.53 and our cash EPS estimate from
|
